In 2010, Bitcoin was worth a mear $0.08. But in 2021, its value topped more than $68,000!
While the cryptocurrency market is more volatile than other markets, that isn’t slowing down investors from buying cryptos.
If you want in on the action, you’ll need to know how to get started investing in cryptocurrency. Try a another way of trading click here on finding stocks for swing trading.
Check out these five easy steps to begin.
1. Understand the Market
Before investing in anything, you want to understand what you’re investing in.
For example, if you were going to invest in stocks, you would research the company before buying shares.
You should do the same with your crypto investments because there are thousands of different types of crypto available to purchase.
They all function differently, and new ones enter the market each day.
Further, consider asking and answering questions like, “How does bitcoin work?” before buying any. Bitcoin is not backed by hard assets or cash flow. Its value comes from investors’ outlooks alone, not profits or returns.
The more you know about the crypto market and individual currencies before you invest, the better investments you can make.
2. Decide What to Buy and Where
After doing your research, you can decide which cryptos you want to buy. But then, you need to figure out where to buy them.
Cryptocurrency exchanges allow for trading cryptos and other assets such as digital and fiat currencies. You can choose from a centralized or decentralized exchange.
Centralized exchanges act as a third party between the buyer and seller. A company operates the exchange, giving it more reliability.
Several reputable centralized exchanges have a large section of currencies available. Some to consider are:
Decentralized exchanges (DEX) allow users to execute peer-to-peer transactions with no involvement of a third party. However, DEX can be difficult to use, and they often lack liquidity.
3. Open and Fund Your Account
On your chosen exchange, open an account. Of course, you’ll need to supply your personal information and verify your identity to do this.
After the account is open, fund it with fiat money. Transfer dollars, or other fiat currencies, into your account so you can start buying cryptos.
4. Buy Your Crypto
The exchange will provide you with directions on how to submit an order to buy cryptocurrency. Follow the steps for each crypto you want to buy.
If you use a centralized exchange, the provider will execute the trade for you on your behalf.
5. Store and Spend Your Investment
Now that you’ve made a purchase, you can store your cryptocurrency in a digital wallet. The exchange you use can host your digital wallet, or you can use an independent wallet provider.
When you’re ready to spend some of the money, you can execute another trade to convert your cryptocurrency back into fiat money.
You can also find Bitcoin ATM to withdraw your crypto into cash for easy spending.
Now You Know How to Get Started Investing in Cryptocurrency
With this quick guide, you can start investing in Bitcoin and other cryptocurrencies. This new type of investing awaits you.
If you still have questions about how to get started investing in cryptocurrency, check out the rest of the blog for more information.